Baldwin Rolls Out Bill to Lower Costs for First-Time Homebuyers

WASHINGTON, D.C. – Senator Tammy Baldwin (D-WI) and her colleagues introduced legislation to lower the cost of purchasing a home for first-time buyers. The First-Time Homebuyer Tax Credit Act, which would support homeownership by establishing a refundable tax credit worth up to 10 percent of a home’s purchase price – up to a maximum of $15,000 – for first-time homebuyers.

“Wisconsin families should be able to comfortably buy a home in their community, but right now that dream is out of reach for too many,” said Senator Baldwin. “Buying a home is an essential part of the American dream, and I’m committed to helping more Wisconsinites find a home and build a life in our communities. I am working to tackle the housing crisis from all angles, from taking on Wall Street investors who are gobbling up homes to securing funding to build more affordable houses, and now, I am excited to take action to lower costs for first-time homebuyers.”

In 2022, the median sale price for a home in the U.S. was 5.6 times higher than the median income, a ratio that is higher than during the years immediately preceding the 2007 mortgage crisis and is the highest disparity on record. Nationwide, the shortage of affordable housing opportunities costs the American economy an estimated $2 trillion each year.

The typical age of a first-time homebuyer reached a record high of 36 in 2022, up from 29 in 1981. In 2022, first-time homebuyers made up just 26 percent of all homebuyers nationwide compared to 38 percent in 1981.

Under the First-Time Homebuyer Tax Credit Act, taxpayers would have the option of receiving the credit at the time of purchase by working with their mortgage issuer. Alternatively, taxpayers could elect to treat the purchase of their home as occurring in the prior taxable year to receive the credit before tax season if they are unable to qualify for the credit at point of sale.

The credit phases out for those making above 150 percent of area median income and for those buying a house with a purchase price above 110 percent of the area median purchase price. Additionally, the credit is limited to home purchases financed through federally backed mortgages.

Senator Baldwin has been working to bring down housing costs for Wisconsinites and level the playing field for first-time homebuyers. She brought home direct support for affordable housing projects across the state in the recently passed funding legislation. Senator Baldwin has worked to crack down on wealthy out-of-state investors who buy up housing stock and lock first-time homebuyers out of homeownership, including efforts to expand resources for families interested in purchasing single-family homes, penalize large investors for gobbling up housing stock, and eliminate tax breaks for those investors.

A summary of the bill is available here. Full text of this legislation is available here.

An online version of this release is available here.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. It has not been verified for its accuracy or completeness.